UK tobacco giant BAT to cut 2,300 jobs

September 12, 2019

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British American Tobacco has announced plans to cut 2,300 jobs as it shifts away from traditional cigarettes.

BAT said it was creating a “more efficient, agile and focused” company as it focused on e-cigarettes and other new categories of product.

The firm said management layers would be reduced and simplified under a plan to be substantially completed by January next year.

A BAT spokesperson declined to give any details of where the jobs would go.

The company has its headquarters in London and has 55,000 employees worldwide, with 55 factories in 48 countries.

BAT shares were up 2.5% in Thursday morning trading in London.

“With the focus on simplification and removal of management layers, it is expected that over 20% of the senior roles in the organisation will be affected,” it said.

New chief executive Jack Bowles, who has been in the role for five months, said he wanted to “ensure a future fit culture”.

“My goal is to oversee a step change in ‘new category’ growth and significantly simplify our current ways of working and business processes, whilst delivering long-term sustainable returns for our shareholders. This is a vital first move to help achieve these goals,” he added.

Vaping concerns

Among its new category products is the Vype e-cigarette, which it launched in 2013.

BAT’s emphasis on “new categories” comes amid signs that US regulators are preparing to take a tougher stance on e-cigarettes.

On Wednesday, President Donald Trump announced that his administration would ban flavoured e-cigarettes after a spate of vaping-related deaths.

US Health Secretary Alex Azar said the Food and Drug Administration (FDA) would finalise a plan to take all non-tobacco flavours off the market.

Earlier this week, US First Lady Melania Trump tweeted that she was “deeply concerned about the growing epidemic of e-cigarette use in our children”.

“The regulatory pressure on the tobacco industry just dialled up a notch,” said Russ Mould, investment director at AJ Bell.

He said tobacco firms had turned their attention to e-cigarettes because of falling numbers of smokers and stricter rules in developing countries.

“What’s being announced across the Atlantic could see those plans go up in smoke, particularly given the size of that market. After all, it’s not just the young who opt for flavoured vaping products,” he added.

“Today’s announcement represents a bold first step for new chief executive Jack Bowles, but he must hope the crackdown on vaping doesn’t see his growth ambitions run out of puff.”